Institutionalized Inequity and Chicago Real Estate

Beryl Satter’s Family Properties: How the Struggle Over Race and Real Estate Transformed Chicago and Urban America is a brilliant book. A historian with a personal history with Chicago real estate, Satter’s father, Mark Satter, was a lawyer and landlord in Lawndale, a working west-side neighborhood in Chicago. Mr. Satter died in 1965, short on funds and seemingly crushed by his legal, political, and economic battles when Beryl was six. As Beryl grew up, her family did not discuss Mr. Satter’s struggles to find remedies for scores of African-American homeowners. She did not learn about her father’s conflicts around contract selling, redlining, and the Federal Housing Authority. Nor did the family share much about Mr. Satter’s idealism, publicity, or investment properties.

To understand her father’s life, Beryl met with family, friends, opponents and clients. She combed scrapbooks assembled by her brother. She conducted painstaking research to create a highly detailed history of her father and the environment in which he worked. Much more than family memoir, however, Satter drew on her skills as a historian to explain how the city’s segregated real estate market came into being. In Family Properties she follows the story through the 1960s, Martin Luther King’s stay in Chicago, and into the 1970s and beyond. The book covers politics, policy, and goes far in explaining how and why Chicago neighborhoods are what they are. To understand Chicago, Family Properties is a valuable resource.

But before Chicago, it is important to have a background on national housing policy. The Federal Housing Authority, a New Deal creation, started in the mid-1930s to track potential risk in urban neighborhoods for bank mortgages and investment. Using city maps the authority marked out zones for A (strong development), B (acceptable), C (declining), and D (unsafe). The D areas, outlined in red on maps, were consistently urban and home to African-Americans or immigrants. Once a neighborhood was redlined, banks would not offer mortgages. Property values, accordingly, declined. In sum, national economic policy created urban ghettos.

While redlining a neighborhood might seem to limit investment, sharp-eyed real estate entrepreneurs in Chicago saw opportunities. After World War II, jobs were on the rise and immigration from southern African-Americans was high. All of these people, many of whom were making solid money, needed places to live. Housing in many Chicago neighborhoods was simply impossible; people would not sell or rent to blacks or non-whites. African-Americans who wanted to purchase homes were limited in terms of possible neighborhoods and in financing. Most purchased homes through what was called contract selling, buying at a high interest rates with obligations and no clear claim to title.

Hundreds upon hundreds of upper-class and upper-middle-class Chicagoans of means became real estate investors, buying properties and reselling at two, three, four or five times the purchase price to African-Americans under contract. If the contract purchaser missed payments or did pay for specified improvements, the white seller could often reclaim the property. Return on rates were very high, financed by the hard work of a Black working and middle class. Once a racially mixed neighborhood, like Lawndale, which had been primarily Jewish before the war, started to become home to African-Americans, economic and cultural pressures sped the process.

Mark Satter was an attorney with a small office and a strong sense of social justice. He had been a member of the Communist Party and a champion for the downtrodden, savoring the fight. Once he started to learn about contract selling and the exploitation of African-American home buyers, he was a tireless combatant for his clients. Unfortunately, he was also under-resourced and a lightning rod for his critics. Contract sellers benefited from well-crafted legal documents that placed an assumption of expertise and responsibility on the buyer. Legal requirements for real estate brokers was also light, allowing contract sellers to misrepresent or poorly represent home buyers. In sum, the system was rigged against African-Americans. Satter’s clients rarely found relief in courts.

Mark Satter’s most significant victory, perhaps, was his ability to publicize the issue through the press and neighborhood groups. When he passed away, many home owners remain enraged and engaged, enabling the creation of the Contract Buyers League. This grass-roots organization waged a lengthy court battle against contract sellers, banks, and the federal agencies responsible for institutionalized discrimination. Beryl Satter’s history carefully details the courts cases, highlighting the broad political gains made by the group and its legal failures. Despite the widely publicized unfairness of contract sellers, ultimately the law was their ally and protector.

Interwoven in this history is the story of Chicago’s politics and political leaders. Richard J. Daley plays a prominent role, as does the Democratic machine, Saul Alinksy, and other activists. Rev. Martin Luther King’s Chicago campaign are part of the story, too. The context and analysis that Beryl Sutter offers helps to explain why King’s efforts never really took hold and found success.

It is easy to understand racism when there are identifiable villains, heroes, and conflicts. Public struggles, such as the Greensboro, North Caroline sit-ins and Rosa Parks and the Montgomery Bus Boycott, are good examples of historical battles that add up to a clear narrative that ends with success. The real history of American racism, however, resists straightforward narratives. The battles are lengthy and complicated and often have unsatisfying indeterminate outcomes. Serious analysis of institutional racism in the United States demands patience, hard work, and a willingness to tolerate complicated histories. It is also the only way to get a clear grasp why our major cities are often hyper-segregated with many black Americans often living in completely different neighborhoods than white Americans.

I encourage you to read Family Properties. Neither easy nor satisfying, it is powerfully eye-opening and superb history.